Monthly Archives: June 2013

Warning that the world is not on track to limit the global temperature increase to 2 degrees Celsius, the International Energy Agency (IEA) today urged governments to swiftly enact four energy policies that would keep climate goals alive without harming economic growth.

Noting that the energy sector accounts for around two-thirds of global greenhouse-gas emissions, she added: “This report shows that the path we are currently on is more likely to result in a temperature increase of between 3.6 °C and 5.3 °C but also finds that much more can be done to tackle energy-sector emissions without jeopardising economic growth, an important concern for many governments.”

New estimates for global energy-related carbon dioxide (CO2) emissions in 2012 reveal a 1.4% increase, reaching a record high of 31.6 gigatonnes (Gt), but also mask significant regional differences. In the United States, a switch from coal to gas in power generation helped reduce emissions by 200 million tonnes (Mt), bringing them back to the level of the mid‑1990s. China experienced the largest growth in CO2 emissions (300 Mt), but the increase was one of the lowest it has seen in a decade, driven by the deployment of renewables and improvements in energy intensity. Despite increased coal use in some countries, emissions in Europe declined by 50 Mt. Emissions in Japan increased by 70 Mt.

The new IEA report presents the results of a 4-for-2 °C Scenario, in which four energy policies are selected that can deliver significant emissions reductions by 2020, rely only on existing technologies and have already been adopted successfully in several countries.

“We identify a set of proven measures that could stop the growth in global energy-related emissions by the end of this decade at no net economic cost,” said IEA Chief Economist Fatih Birol, the report’s lead author. “Rapid and widespread adoption could act as a bridge to further action, buying precious time while international climate negotiations continue.”

Targeted energy efficiency measures in buildings, industry and transport account for nearly half the emissions reduction in 2020, with the additional investment required being more than offset by reduced spending on fuel bills.

Limiting the construction and use of the least-efficient coal-fired power plants delivers more than 20% of the emissions reduction and helps curb local air pollution. The share of power generation from renewables increases (from around 20% today to 27% in 2020), as does that from natural gas.

Actions to halve expected methane (a potent greenhouse gas) releases into the atmosphere from the upstream oil and gas industry in 2020 provide 18% of the savings.

Implementing a partial phase-out of fossil fuel consumption subsidies accounts for 12% of the reduction in emissions and supports efficiency efforts.

The report also finds that the energy sector is not immune from the physical impacts of climate change and must adapt. In mapping energy-system vulnerabilities, it identifies several sudden and destructive impacts, caused by extreme weather events, and other more gradual impacts, caused by changes to average temperature, sea level rise and shifting weather patterns. To improve the climate resilience of the energy system, it highlights governments’ role in encouraging prudent adaptation (alongside mitigation) and the need for industry to assess the risks and impacts as part of its investment decisions.

The financial implications of climate policies that would put the world on a 2 °C trajectory are not uniform across the energy sector. Net revenues for existing renewables-based and nuclear power plants increase by $1.8 trillion (in year-2011 dollars) collectively through to 2035, offsetting a similar decline from coal plants. No oil or gas field currently in production would need to shut down prematurely. Some fields yet to start production are not developed before 2035, meaning that around 5% to 6% of proven oil and gas reserves do not start to recover their exploration costs. Delaying the move to a 2 °C trajectory until 2020 would result in substantial additional costs to the energy sector and increase the risk of assets needing to be retired early, idled or retrofitted. Carbon capture and storage (CCS) can act as an asset protection strategy, reducing the risk of stranded assets and enabling more fossil fuel to be commercialised.

To download the WEO special report Redrawing the Energy-Climate Map, click here.

The International Energy Agency is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing reliable and unbiased research, statistics, analysis and recommendations.

The country will have to wait more than three years before the proposed 115 megawatts (MW) of energy from renewable sources is added to the national grid.

The introduction of the renewable energy should cut Jamaica's oil bill substantially (US$55 million at current prices) but the three-year wait will mean a painful delay for Jamaicans desperate for lower electricity bills.

The Office of Utilities Regulation (OUR) last week accepted 28 proposals for the development of projects aimed at generating the renewable energy.

The submissions, from 20 local and overseas companies, were revealed during a public opening of bid documents last Monday.

The proposals included two for wind projects, one for biomass, and 25 for solar energy.

The overseas investors include Wirsol AG and Roc Energy, which have tendered a proposal for a 78-megawatt solar park power generation project at a cost of some US$140 million; and New York-based entity, Roraima Consulting Incorporated, which submitted a bid for a 24-megawatt solar power generating project, at a cost of approximately US$59 million.

Project manager at the OUR, Peter Johnson, said the high level of interest in supply renewable energy was very encouraging.

“We are hoping that these proposals will actually bear fruit and that we will get some good solutions out of (them),” stated Johnson.

“This is the first tranche of that and we're very excited with what we have seen.”

According to Johnson, with the bids in hands, the OUR will now move towards the evaluation processes, which should be completed by August 5.

BEST RELIABILITY

“The evaluation will look at the best proposals in terms of the best reliability, the best price (and) will also look to see if one proposal or a combination of proposals will best fit the needs of the country.”

The highest-ranked applications will be notified on September 11, with the OUR looking to complete the negotiation of project agreements by June 18, 2014.

The selected applicants are expected to post their performance security deposit by June 28, 2014, and begin construction in August 2014.

The proposed commissioning date of the new renewable energy plant is August 2016.

A request for proposals was issued by the OUR in November 2012, when it invited interested entities to submit bids for the supply of up to 115MW of renewable energy electricity generation to the national grid on a 'Build, Own and Operate' basis.